RBS faces burgeoning housing-related penalties

Washington

EVEN as Royal Bank of Scotland Group said on Wednesday it would pay US$5.5 billion to settle a US lawsuit over its crisis-era mortgage-bond business, it told investors that another big bill may be on the way.

It was referring to an unresolved investigation by the US Justice Department into whether the bank misrepresented the quality of residential mortgage-backed securities it sold a decade ago. RBS is one of the last global banks to face a reckoning with the Justice Department. Its tab could rank near the top of the group, judging by the deal the bank struck this week with the Federal Housing Finance Agency (FHFA) over similar conduct.